View full sizeJesse Herman, left, and Johnny Colbert work behind the counter at a brisk pace, helping medical marijuana customers at Lightshade Labs in Denver, Colo. Lightshade Labs features a retail dispensary at their site, which is a full service medical marijuana center. Beth NakamuraBeth Nakamura/The Oregonian

SALEM -- Oregon would be home to an estimated 225 state-licensed medical marijuana retailers in the next two years if lawmakers pass a bill that would legalize such establishments, according to a state analysis.

Medical marijuana retailers would pay $4,000 a year each to maintain their state registrations, generating an estimated $900,000 in the next two years, analysts with the Legislative Fiscal Office concluded after examining House Bill 3460. A budgetary subcommittee reviewed the figures at a hearing Thursday.

Those fees would cover the administrative and staffing costs associated with the registry, which would require an estimated four new state positions.

"The black market in our area is out of control," Buckley said, referring to Jackson County, which along with Josephine County, is the heart of the state's outdoor marijuana cultivation industry.

Said Sen. Alan Bates, D-Medford: "We grow it and you smoke it up here. I would consider it to be the biggest cash crop in southern Oregon."

The Oregonian's yearlong examination of the state's medical marijuana program found the drug is widely trafficked out of state for big profits. Excess medical marijuana also finds its way into the state's booming and unregulated retail medical marijuana industry, where patients walk into cafes, lounges and collectives with cash and walk out with cannabis.

Under Buckley's bill, business owners would have to pass criminal background checks, document the amount of marijuana coming into their establishments and verify that it's from state-registered growers. The bill stops short of requiring routine inspections by the state or by law enforcement, a feature central Colorado's sweeping regulations over the medical marijuana industry.

"You are not controlling the production," he said of Buckley's bill. "You are just controlling a small part of the distribution."

Under the proposal, law enforcement would be allowed only to verify whether a dispensary is registered with the state. Police would not be able to check on the establishment's supply of cannabis, its growers or number of patients.

The bill would prohibit medical marijuana retail outlets from operating within 1,000 feet of each other or a school. They would have to operate in agricultural, industrial or commercial areas.

The location of medical marijuana producers is a concern, Bates told fellow lawmakers. But Buckley's bill does not limit where medical marijuana can be grown.

"We've got pot houses in neighborhoods, cars coming and going at night," said Bates, who, like Buckley, supports the medical marijuana program. "Right now it's a wild, wild West out there."

Oregon's medical marijuana program, approved by voters in 1998, requires a doctor's recommendation for a patient to acquire an Oregon medical marijuana card.

Bates, a physician, said he has written dozens of such recommendations. He said many of his medical marijuana patients are older, in chronic pain or dealing with cancer, and in need a safe source for cannabis.

"This is a fine first step from my point of view," he said.

The bill is expected head now to a committee work session, then onto the full Ways and Means Committee.